Tesco has updated the feed tracker contracts to its five shell egg suppliers in a show of support to producers who are grappling with eye-watering inflation and soaring feed and energy costs.
The new five-year contracts for Anglia Free Range Eggs, Glenrath Farms, Griffiths Family Farms, Noble Foods and Skea Eggs will mean the supermarket giant remains 100% British on all of its shell eggs.
With poultry feed representing up to 70% of the cost of production, sector leaders have welcomed the new deal using Tesco’s feed model.
Mark Williams, chief executive of the British Egg Industry Council, said: “It is encouraging to see that Tesco is taking a long-term and sustainable approach to its egg supplier relationships at a very challenging time when costs are running so high.”
Robin Gooch, chief executive of the British Free Range Egg Producers Association (Bfrepa), said the model is “best in class”, but urged Tesco to insist that all its packers pass on the benefit of the feed tracker to all their contracted producers.
“Its five suppliers do not offer it to all the producers supplying Tesco as it is only offered to the packers – not directly to its farmers,” said Mr Gooch.
The tracker is designed to protect producers from the worst of the feed cost inflation, but the Bfrepa chief said more needed to be done to help producers handle the challenging market conditions.
“The feed tracker does not cover the massive inflation in energy, fuel and labour that producers are facing, and this still needs to be addressed in the egg sector, as Tesco seems to have done to their milk and pork producers.
“The best way to ensure a sustainable supply of British free-range eggs is to pay a fair price for the product using a cost of production model that must be offered by Tesco to every one of its egg farmers.”
However, Clair Bullen of Anglia Free Range Eggs said the Tesco feed model would help protect producers from the worst of the feed cost inflation.
“This, combined with the longer-term commitments Tesco offers, will help provide much needed security and stability,” she said.